nep-int New Economics Papers
on International Trade
Issue of 2020‒11‒09
twenty-six papers chosen by
Luca Salvatici
Università degli studi Roma Tre

  1. Is there any relationship between Marginal Intra-Industry Trade and Employment Change? Evidence from Indian Industries By Sakshi Aggarwal; Debashis Chakraborty
  2. Tracing the Local Impacts of Exports on Poverty and Inequality: The Case of Mexico By Carlos Rodríguez-Castelán; Emmanuel Vazquez; Hernan Winkler
  3. Multi-product firms and product quality expansion By Van Pham; Alan Woodland
  4. Trade and FDI Thresholds of CO2 emissions for a Green Economy in Sub-Saharan Africa By Asongu, Simplice A; Odhiambo, Nicholas M
  5. The Dynamic Impact of Exporting on Firm R&D Investment By Maican, Florin; Orth, Matilda; Roberts, Mark J.; Anh Vuong, Van
  6. Assessing Ukraine's Role in European Value Chains: A Gravity Equation-cum-Economic Complexity Analysis Approach By Matte Hartog; Frank Neffke
  8. Productivity Drivers: Empirical Evidence on the Role of Digital Capital, FDI and Integration By Amat Adarov; David Klenert; Robert Marschinski; Robert Stehrer
  9. Beyond Imports: The Supply Chain Effects of Trade Protection on Export Growth By Kyle Handley; Fariha Kamal; Ryan Monarch
  10. Russia’s foreign trade in 2019 By Volovik Nadezhda; Knobel Alexander
  11. Russia in international economic institutions By Ignatov Aleksandr; Larionova Marina; Popova Irina; Sakharov A.; Shelepov A.
  12. International Trade under Monopolistic Competition beyond the CES By Badis Tabarki
  13. Productivity and Trade Dynamics in Sudden Stops By Felipe Benguria; Hidehiko Matsumoto; Felipe Saffie
  14. Labour, Trade, and Wage Inequality: Some New Results By Manoj Pant; Sugandha Huria
  15. Why are Africa's female entrepreneurs not playing the export game? Evidence from Ghana By Ackah, Charles Godfred; Görg, Holger; Hanley, Aoife; Hornok, Cecília
  16. Russia’s participation in the WTO disputes By Baeva Marina; Knobel Alexander
  17. Local Product Relatedness and Export Behavior at the Firm Level in Japan (Japanese) By HAYAKAWA Kazunobu; MATSUURA Toshiyuki
  18. Customs administration: novation of 2019 By Balandina Galina
  19. West Africa’s dependency on imports of dairy products By Chatellier, Vincent
  20. Emissions Trading and International Trade By ISHIKAWA Jota; KIYONO Kazuharu; YOMOGIDA Morihiro
  21. Offshoring and Inflation By Diego A. Comin; Robert C. Johnson
  22. West Africa’s dependency on imports of dairy products By Vincent Chatellier
  23. The Effects of Financial Decoupling of the U.S. and China: Simulations with a Global Financial CGE Model By P.B. Dixon; J.A. Giesecke; J. Nassios; ; M.T. Rimmer
  24. [WTO Case Review Series No.33] China – Domestic Support for Agricultural Producers (DS511): Calculation of Market Price Support (Japanese) By SEKINE Takemasa
  25. Labour Market Realism and the Global Compacts on Migration and Refugees By Philip Martin; Martin Ruhs
  26. New-Keynesian Trade: Understanding the Employment and Welfare Effects of Trade Shocks By Mauricio Ulate

  1. By: Sakshi Aggarwal (Indian Institute of Foreign Trade (IIFT)); Debashis Chakraborty (Indian Institute of Foreign Trade (IIFT))
    Abstract: While India has developed deeper integration with global trade flows since the economic reforms initiated in 1991 in general, the simultaneous exports and imports with partner countries have witnessed considerable rise in particular. There exists a rich literature on India’s aggregate as well as sectoral overlapping trade, termed as Intra-Industry Trade (IIT). It is however argued that the static measures of IIT fails to capture the dynamism involved, and Marginal Intra-Industry Trade (MIIT) index is used to compute the trade overlap for this purpose. The current analysis observes a rising trend in India’s MIIT in select industrial sectors since 2001. However, India is also suffering from a rising trade deficit in several industrial sectors, and a possible trade-led employment effect cannot be ruled out. Given this background, the current analysis explores the relationship between MIIT and employment changes in the selected sectors. In addition, the stability analysis explores the differing influence of the independent variables on employment changes, based on trade balance pattern. The empirical results indicate that MIIT, increase in productivity, skilled workforce intensity, trade balance, trade openness and FDI inflows significantly influence absolute employment changes. Moreover, sectors with higher MIIT, high relative growth rate, skill intensity and trade balance facilitate higher absolute changes in employment.
    Keywords: Indian industrial sector, Marginal Intra-industry Trade, trade and labor market interactions, panel data models
    JEL: F13 F14 F16 C23
    Date: 2020–10
  2. By: Carlos Rodríguez-Castelán (World Bank); Emmanuel Vazquez (CEDLAS-IIE-FCE-UNLP); Hernan Winkler (World Bank)
    Abstract: Evidence about the effect of exports on welfare at the local level is scarce. Using a unique dataset of international trade and poverty maps for almost 2,000 Mexican municipalities between 2004 and 2014, the study presented in this paper provides new evidence on the impact of a significant rise in exports on poverty and inequality at the local level. The analysis implements an instrumental variable approach that combines the initial structure of exports across municipalities with global trends in exports from developing to developed countries by sector. The results show that a 10 percent increase in the ratio of exports to workers reduces income inequality measured by the Gini coefficient by 0.17 points (using a 0 to 100 scale), but no significant effects on poverty reduction or average household incomes are identified. The lack of impacts on average incomes is driven by a rise in the supply of labor at the local level because municipalities with higher export growth experienced an increase in labor force participation and attracted more net migration, particularly of unskilled workers. Therefore, while total labor incomes grew in response to an increase in exports, average labor incomes per worker did not change. Declining remittances also blunted the effect of growing exports on household incomes.
    JEL: F14 F16 I3 D3 J61
    Date: 2020–11
  3. By: Van Pham; Alan Woodland
    Abstract: This paper develops and analyzes a model of international trade comprising multiproduct firms that can produce a range of product varieties distinguished by quality. First, it analyses the within-firm distribution of product quality and argues that firms export decisions are sensitive to their sizes and their product quality level. Specifically, a firm successfully exports both its high-end products and low-end products. Also, the sales of its top-end products relative to sales of its lower-end products is sensitive to the extent to which effective labour costs rise with quality. Second, the paper explores the heterogeneous effects of trade liberalization on multi-product firm behaviour and quality range choices. Under trade liberalization, small domestic firms experience a shrinkage of their product quality range, while even the new small-sized exporters narrow their product quality range to focus on an export variety. In contrast, existing exporters (large firms) can compete on both price and quality under trade liberalization by expanding their export product range toward both the low-end and high-end varieties. There is a greater expansion toward the lower-end varieties relative to the higher-end varieties under trade liberalization, this relative expansion decreasing as the variable trade cost decreases.
    Keywords: Firm heterogeneity, Multiproduct firms, Quality range of varieties, Exports, Productivity
    JEL: F12 F13 L11 L23 L25
    Date: 2020–10
  4. By: Asongu, Simplice A; Odhiambo, Nicholas M
    Abstract: This research focuses on assessing how improving openness influences CO2 emissions in Sub-Saharan Africa. It is based on 49 countries in SSA for the period 2000-2018 divided into: (i) 44 countries in SSA for the period 2000-2012; and (ii) 49 countries for the period 2006-2018. Openness is measured in terms of trade and foreign direct investment (FDI) inflows. The empirical evidence is based on the Generalised Method of Moments. The following main findings are established. First, enhancing trade openness has a net positive impact on CO2 emissions, while increasing FDI has a net negative impact. Second, the relationship between CO2 emissions and trade is a Kuznets shape, while the nexus between CO2 emissions and FDI inflows is a U-shape. Third, a minimum trade openness (imports plus exports) threshold of 100 (% of GDP) and 200 (% of GDP) is beneficial in promoting a green economy for the first and second sample, respectively. Fourth, FDI is beneficial for the green economy below critical masses of 28.571 of Net FDI inflows (% of GDP) and 33.333 of net FDI inflows (% of GDP) for first and second samples, respectively. It follows from findings that while FDI can be effectively managed to reduce CO2 emissions, this may not be the case with trade openness because the corresponding thresholds for trade openness are closer to the maximum limit. This study complements the extant literature by providing critical masses of Trade and FDI that are relevant in promoting the green economy in Sub-Saharan Africa.
    Keywords: CO2 emissions; Economic development; Africa; Sustainable development
    Date: 2020–10
  5. By: Maican, Florin (University of Gothenburg); Orth, Matilda (Research Institute of Industrial Economics (IFN)); Roberts, Mark J. (Pennsylvania State University); Anh Vuong, Van (Maastricht University)
    Abstract: This article estimates a dynamic structural model of firm R&D investment in twelve Swedish manufacturing industries and uses it to measure rates of return to R&D and to simulate the impact of trade restrictions on the investment incentives. R&D spending is found to have a larger impact on firm productivity in the export market than in the domestic market. Export market profits are a substantial source of the expected return to R&D. Counterfactual simulations show that trade restrictions lower both the expected return to R&D and R&D investment level, thus reducing an important source of the dynamic gains from trade. A 20 percent tariff on Swedish exports reduces the expected benefits of R&D by an average of 32.2 percent and lowers the amount of R&D spending by 13.9 percent in the high-tech industries. The corresponding reductions in the low-tech industries are 30.4 and 8.9 percent, respectively. R&D adjustments in response to export tariffs mainly occur on the intensive, rather than the extensive, margin.
    Keywords: R&D; Innovation; Trade policy; Productivity
    JEL: F13 L13 L60 O30
    Date: 2020–10–13
  6. By: Matte Hartog (Center for International Development at Harvard University); Frank Neffke (Center for International Development at Harvard University)
    Abstract: We analyze Ukraine's opportunities to participate in European value chains, using traditional gravity models, combined with tools from Economic Complexity Analysis to study international trade (exports) and Foreign Direct Investment (FDI). This toolbox is shown to be predictive of the growth and entry of new exports to the EU's Single Market, as well as foreign direct investments from the Single Market in Ukraine. We find that Ukraine has suffered from a decline of trade with Russia, which has led not only to a quantitative but also a qualitative deterioration in Ukrainian exports. Connecting to western European value chains is in principle possible, with several opportunities in the automotive, information technology and other sectors. However, such a shift may lead to a spatial restructuring of the Ukrainian economy and a mismatch between the geographical supply of and demand for labor.
    Keywords: economic complexity, value chains, foreign direct investment
    Date: 2020–10
  7. By: Pavel S. Pronin (National Research University Higher School of Economics)
    Abstract: This paper explores how international trade flows contribute to democracy and shows that countries' trade partners define the nature of this relationship: higher volumes of trade with democracies are conducive to democracy, while higher trade levels with autocracies undermine it. Moreover, the effects of trade are uneven and are pronounced only for 49 states (34% of the sample). Results also indicate that trade with democracies does not sufficiently influence democratic transitions but rather helps already established democracies to endure. The "autocratic trade", on the opposite, undermines democratic survival, and it also reduces the probability of transition from partial democracies. Therefore, trade only partially supports democratic promotion when it is, indeed, a source of authoritarian promotion and consolidation. These findings are robust to accounting for autocorrelation, checking sensitivity of model specifications and acknowledging that democracy is measured with error. Finally, Instrumental Variable estimation, using predicted trade volumes from the Gravity Equation, shows that these effects are also causal.
    Keywords: Democracy, Regime Transitions, International Trade, Economic Globalization, Bayesian Modeling
    JEL: D72 F68
    Date: 2020
  8. By: Amat Adarov (The Vienna Institute for International Economic Studies (wiiw)); David Klenert (European Commission - JRC); Robert Marschinski (European Commission - JRC); Robert Stehrer (The Vienna Institute for International Economic Studies (wiiw))
    Abstract: There are marked differences in productivity dynamics between countries as well as industries, often leading to substantial performance gaps, such as the gap in labour productivity between the EU and the US. In this article, we use the 2019 release of the EU KLEMS database to look into the drivers of productivity. In particular, we analyse how different types of capital (including intangible capital), foreign direct investment, integration into global value chains and EU integration affect labour productivity. Key findings are that intangible Information and Communication Technology (ICT) capital is a strong driver of productivity both at sectoral and aggregate levels, even more so than tangible ICT capital. Furthermore, backward global value chain integration and EU integration are positively associated with labour productivity. Contrary to expectations, we do not find evidence of a productivity-enhancing effect of foreign direct investment. Finally, we estimate by how much the productivity gap between the EU and the US could be reduced through different ICT investment policies.
    Keywords: productivity, productivity gap, digitalisation, ICT capital, FDI, global value chains, intangible capital
    Date: 2020–10
  9. By: Kyle Handley; Fariha Kamal; Ryan Monarch
    Abstract: The United States imposed a series of wide-ranging increases in import tariffs from 2018 through 2019. By August of 2019, $290 billion of U.S. imports - about 12% of the total - were subject to an average tariff increase of 24 percentage points.
    Date: 2020–10–16
  10. By: Volovik Nadezhda (Gaidar Institute for Economic Policy); Knobel Alexander (Gaidar Institute for Economic Policy)
    Abstract: Amid prolonged trade tensions, high political uncertainties and the COVID-19 pandemic, the global growth outlook has become much worse. In the past year, in global economic growth rates there was a dramatic slowdown both of international trade flows and global production activities. The growing tariffs and rapid changes in the trade policy led to the decline of business confidence and, consequently, restrained investment growth in most regions. Sluggish demand affected global prices of primary products, particularly, crude oil and commercial metals
    Keywords: Russian economy, foreign trade, terms of trade, regional pattern
    JEL: F10 F13 F19
    Date: 2020
  11. By: Ignatov Aleksandr (RANEPA); Larionova Marina (RANEPA); Popova Irina (RANEPA); Sakharov A. (RANEPA); Shelepov A. (RANEPA)
    Abstract: In 2019, the effects of geopolitical contradictions and increasing protectionism continued to influence the global economy, the Russian economy, the economies of our partner countries, and the current agendas of international institutions. The escalation of tensions undermines confidence across the business community and negatively affects investment activity. Investment growth in the G20 countries (China excluding) in 2019 dwindled to 1% (vs 5% in 2018). The growth rate of global trade fell to a record low since 2009 and amounted to 1%.[1] According to the estimates released by the IMF, the negative impact of trade conflicts between the US and China is going to push down global GDP, to 0.8% in in 2020.[2] Even in case of a favorable outcome of the tariff confrontation and the closure of the trade deal between China and the USA, the economies of China’s trading partners (the EU, Japan, South Korea) can expect to experience some negative consequences as a result of changes in the trade flows.[3] The risks of a further slowdown in economic growth remain high, making obvious the need for collective action to restore confidence, strengthen inclusive growth, boost employment, and improve the well-being of citizens. The growing need for multilateral cooperation is also determined by the fact that digital transformation multiplies the cross-border effects of national policies, thus increasing the potential benefits of international cooperation, while at the same time also increasing the risks associated with failures in the operation of multilateral institutions. Under these conditions, Russia’s priority is to build a positive agenda in global and regional economic organizations, as well as cooperation on risks monitoring, development of measures aimed at their prevention overcoming negative unanticipated consequences for the global economy.
    Keywords: Russian economy, international organizations, international institutional arrangements
    JEL: F5 F53 F55
    Date: 2020
  12. By: Badis Tabarki (UP1 - Université Panthéon-Sorbonne, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)
    Abstract: This paper considers a general yet tractable demand system encompassing directly- and indirectly-separable preferences, with homothetic CES as a commonn ground. An added flexibility of this demand system is that it allows for two alternative curvatures of demand. Beyond the CES, demand may be either "sub-convex": less convex than the CES, or "super-convex": more convex than the CES. Embedded in a general equilibrium trade model featuring standard assumptions on the supply side, this flexible demand system yields new comparative statics results and a wide range of predictions for the gains from trade, while illustrating existing ones in a simple and compact way. The main finding of this paper is that while demand curvature governs comparative statics results and plays a crucial role in determining the structure and the magnitude of welfare gains from trade, the type of preferences has only a second-order importance from a welfare standpoint.
    Keywords: gains from trade,heterogeneous firms,non-CES preferences,demand curvature
    Date: 2020–08
  13. By: Felipe Benguria (Assistant Professor, Department of Economics, University of Kentucky (E-mail:; Hidehiko Matsumoto (Economist, Institute for Monetary and Economic Studies, Bank of Japan (currently, Assistant Professor, National Graduate Institute for Policy Studies, E-mail:; Felipe Saffie (Assistant Professor, Darden School of Business, University of Virginia (E-mail:
    Abstract: This paper proposes a framework to jointly study productivity and trade dynamics during financial crises. The persistent output loss caused by crises is driven by lower productivity growth, which is determined by changes in product entry and exit margins in domestic and export markets. We calibrate and validate the model using unique data on firms' product portfolios, finding it closely matches the behavior of various margins during Chile's 1998 sudden stop. We decompose the sources of the welfare cost of sudden stops, finding a third of the welfare cost is due to a decline in productivity growth. Lower productivity growth, in turn, is due mostly to slower firm and product entry into the domestic market, while a decrease in production costs induces surviving firms to tilt their product portfolios towards export markets, boosting the productivity recovery in the aftermath of the crisis.
    Keywords: Endogenous growth, Firm dynamics, Trade dynamics, Sudden Stops
    JEL: F10 F41 F43 F44 O33
    Date: 2020–10
  14. By: Manoj Pant (Indian Institute of Foreign Trade (IIFT)); Sugandha Huria (Indian Institute of Foreign Trade (IIFT))
    Abstract: This paper reassesses the link between labour, trade, and wage-inequality by proposing a simple modification of the standard 2-sector model with wage differential by incorporating the importance of consumption time. Emphasising the point that outsourcing of this time is limited by a country’s demographics, unlike outsourcing of production, which is restricted by both geography and technology, we focus on the role of a household sector that enables formal sector workers to monetise their time utilised in completing irksome household tasks by outsourcing them to unemployed-unskilled workers available in the labour market. The introduction of this sector alters some of the conventional results in the trade theory. In particular, we show how an increase in household labourers' supply unambiguously benefits formal skilled and unskilled workers, without affecting their gross earnings and production activity, though net income-inequality rises. However, the effect of trade on wage-inequality depends on the extent to which the formal sector workers can free up their time by hiring household labourers. Our framework also questions the cornerstone of the traditional results on trade and wage-inequality based on H-O-S type models and shows how one can explain the simultaneous increase in wage-inequality in developed and developing economies around the world.
    Keywords: Labour, Immigration, Trade, Wage Inequality, Household sector
    JEL: F11 F16 F22
    Date: 2020–10
  15. By: Ackah, Charles Godfred; Görg, Holger; Hanley, Aoife; Hornok, Cecília
    Abstract: We explore the export performance of Africa's underperforming female entrepreneurs, using the Ghanaian ISSER-IGC panel, a comprehensive dataset of manufacturing firms for 2011-2015. Uniquely, the data provides information about the severity of key business constraints, across both male and female entrepreneurs. We find that females are less likely to export (and optimize their exporting) than their male peers. Although reduced access to finance seriously constrains the exports of female entrepreneurs, this limitation does not explain their relative inability to leverage value from exports. Consistent with related work, we find that certain social and cultural constraints, in particular constraints linked to bribes and security concerns, are more deeply felt by female entrepreneurs. This may hint at the exclusion of Africa's females (voluntarily or involuntarily) from male-dominated networks or business practices.
    Keywords: female entrepreneurship,business constraints,productivity,exporting,Africa,Ghana
    JEL: D22 F14 J16
    Date: 2020
  16. By: Baeva Marina (RANEPA); Knobel Alexander (Gaidar Institute for Economic Policy)
    Abstract: Russia has been actively participating in the dispute settlement system handled by the WTO. As of the year-end of 2019, Russia had been involved in a total of 96 disputes: in 8 disputes as a complainant, in 9 disputes as a respondent, and in 79 disputes as a third party. In 2019, Russia became a party to 13 new trade disputes in the framework of the WTO: in one as a complainant, and in 12 – in the role of a third party. In 2019, two disputes that Russia was a main party to (DS493 (complainant), DS512 (respondent)) underwent their key stages – Russia won both these disputes over Ukraine.
    Keywords: Russian economy, foreign trade, WTO, trade disputes
    JEL: F10 F13 F19
    Date: 2020
  17. By: HAYAKAWA Kazunobu; MATSUURA Toshiyuki
    Abstract: This study examines the relationship between local product relatedness and the extensive margin and intensive margin of export, namely the decision to start exporting and amount exported at plant-level, by using the panel dataset of Japanese Census of Manufacture in 2001, 2007, and 2014. First, we calculate the density of bilateral product relatedness and then construct the region-product-level measure for the links between the product relatedness and the local pattern of specialization. We show that local product relatedness has a positive impact on the extensive margin, but not the intensive margin of export at plant-level. This result suggests that firms located in regions with higher local product relatedness are more likely to start exporting.
    Date: 2020–09
  18. By: Balandina Galina (RANEPA)
    Abstract: In the World Bank’s latest “Doing Business – 2020†rating, the Russian Federation is rated again the 99th as regards the “Trading across borders†line, while in the overall rating Russia moves steadily upwards from year to year, having attained the 28th place.2 However, 2019 saw important IT-related changes in customs clearance procedures of Russia’s customs administration.
    Keywords: Russian economy, foreign trade, customs regulation
    JEL: F10 F13
    Date: 2020
  19. By: Chatellier, Vincent
    Abstract: The world dairy sector is undergoing sustained development due to the increasing dairy needs of a growing population and a gradual change in diets. This article looks at the place of West African countries in the "dairy planet". The analysis uses FAO statistical data over a long period (1961 to 2017) and customs statistics from 2000 to 2018 for global data ("BACI" database) and from 2000 to 2019 for European data ("COMEXT" database). Although per capita consumption of dairy products per year is still low in many West African countries compared with industrialised countries, overall requirements for dairy products are increasing rapidly as a result of population growth. Due to numerous difficulties (climate, soil quality, low animal productivity, lack of investment, etc.), the development of milk production in West Africa (5.8 billion litres in 2017 for sixteen countries, equivalent to the production of Brittany) is not sufficient to meet local needs. A little over two thirds of the dairy products imported into this zone come from the EU, whose exports have increased sharply over the past ten years (end of milk quotas). Around 40% of these imports are skimmed milk and vegetable fat powder blends (based on palm oil), a product that benefits from a competitive price and which is only very slightly taxed on entry into West African countries.
    Keywords: Agricultural and Food Policy, Demand and Price Analysis, International Relations/Trade
    Date: 2020
  20. By: ISHIKAWA Jota; KIYONO Kazuharu; YOMOGIDA Morihiro
    Abstract: We explore the effects of international trade in goods and emission permits on global warming and welfare in a two-country, two-good, general-equilibrium model with both Ricardian and Heckscher-Ohlin features. According to our findings, international commodity trading cannot successfully reduce greenhouse-gas (GHG) emissions if the comparative advantage stems from differences in per-capita emission allowances; however, it may reduce emissions if the comparative advantage is also based on differences in technologies. International emissions trading cannot mitigate global warming. Whether it improves welfare would depend on how it affects the terms of trade in goods and climate change. A country with high per-capita emission allowances may import permits and suffer from deterioration in the terms of trade in goods.
    Date: 2020–10
  21. By: Diego A. Comin; Robert C. Johnson
    Abstract: Did trade integration suppress inflation in the United States? We say no, in contradiction to the conventional wisdom. Our answer leverages two basic facts about the rise of trade: offshoring accounts for a large share of it, and it was a long-lasting, phased-in shock. Incorporating these features into a New Keynesian model, we show trade integration was inflationary. This result continues to hold when we extend the model to account for US trade deficits, the pro-competitive effects of trade on domestic markups, and cross-sector heterogeneity in trade integration in a multisector model. Further, using the multisector model, we demonstrate that neither cross-sector evidence on trade and prices, nor aggregate time series price level decompositions are informative about the impact of trade on inflation.
    JEL: E5 F1 F15 F4 F6
    Date: 2020–10
  22. By: Vincent Chatellier
    Abstract: [in French] The world dairy sector is undergoing sustained development due to the increasing dairy needs of a growing population and a gradual change in diets. This article looks at the place of West African countries in the "dairy planet". The analysis uses FAO statistical data over a long period (1961 to 2017) and customs statistics from 2000 to 2018 for global data ("BACI" database) and from 2000 to 2019 for European data ("COMEXT" database). Although per capita consumption of dairy products per year is still low in many West African countries compared with industrialised countries, overall requirements for dairy products are increasing rapidly as a result of population growth. Due to numerous difficulties (climate, soil quality, low animal productivity, lack of investment, etc.), the development of milk production in West Africa (5.8 billion litres in 2017 for sixteen countries, equivalent to the production of Brittany) is not sufficient to meet local needs. A little over two thirds of the dairy products imported into this zone come from the EU, whose exports have increased sharply over the past ten years (end of milk quotas). Around 40% of these imports are skimmed milk and vegetable fat powder blends (based on palm oil), a product that benefits from a competitive price and which is only very slightly taxed on entry into West African countries.
    Keywords: livestock, milk production, milk powder, vegetable fat powder, West Africa, international trade, European Union, competitiveness
    JEL: Q13 Q17 Q18
    Date: 2020
  23. By: P.B. Dixon; J.A. Giesecke; J. Nassios; ; M.T. Rimmer
    Abstract: We add a financial module to the GTAP model, built around an 18-region asset-liability matrix. We simulate financial decoupling between the U.S. and China. We find that the U.S. would gain by limiting its capital flows to China, leading to a redirection of finance to the domestic economy. This would stimulate investment in the U.S. with favorable effects on employment, capital stocks, real GDP, wealth and real wage rates. At the same time investment in China would decline with negative effects on the Chinese economy. Similarly, China would gain by limiting its capital flows to the U.S. and the U.S. would lose. In a tit-for-tat situation in which each country reduces it financial-asset holding in the other country by x per cent, the winner would be China. We conduct additional simulations to compare the effects of trade decoupling with those of financial decoupling.
    Keywords: Financial decoupling U S -China economic relations Trade decoupling Financial module in GTAP CGE simulations
    JEL: C68 F17 F37 F51
    Date: 2020–10
  24. By: SEKINE Takemasa
    Abstract: So far, only a limited number of disputes relating to "domestic support," a technical term used under the Agreement on Agriculture (AoA) to describe the domestic subsidies for agricultural products, has been referred to the WTO dispute settlement mechanism. The reason for such can be attributed to the fact that most WTO Members were, for various reasons, able to comply with the reduction commitments made under the AoA. China was no exception. However, since around 2010, its market price support (MPS) began to gradually increase and eventually, the US decided to bring the case to the WTO when such price seemed to overshoot the level tolerable under the AoA. The significance of this case (DS511) is that the Panel decided to use the period of 1996-1998, which is listed in China's accession document (schedule), as a base period for the calculation of the fixed external reference price (FERP) in estimating the MPS. This conclusion, for newly acceded WTO Members, substantially signifies an amendment to the AoA under which the base period for the FERP is prescribed as 1986-1988. In addition to the substantial issues, the case also includes some important procedural matters such as the partial opening of the proceedings which may have some important implications on future disputes.
    Date: 2020–10
  25. By: Philip Martin; Martin Ruhs
    Abstract: The Global Compacts on Migration (GCM) and Refugees (GCR) include policy recommendations that aim to increase opportunities for legal labour migration, improve protections for migrant workers, and provide refugees with ‘complementary pathways’ to enhanced protection via labour mobility. This paper explains why there are large gaps between these policy recommendations and the labour market policies and realities in the countries that host most of the world’s migrant workers. These gaps between ideals and realities are likely to limit the effective implementation of the GCM/GCR recommendations on labour migration. More ‘labour market realism‘ is needed to incrementally but effectively improve protections for migrant workers.
    Keywords: Global compacts, migrant workers, refugees, complementary pathways
    Date: 2019–03
  26. By: Mauricio Ulate
    Abstract: There is a growing empirical consensus that trade shocks can have important effects on unemployment and nonemployment across local-labor markets within an economy. This paper introduces downward nominal wage rigidity to an otherwise standard quantitative trade model and shows how this framework can generate changes in unemployment and nonemployment that match those uncovered by the empirical literature studying the “China shock.” We also compare the associated welfare effects predicted by this model with those in the model without unemployment. We find that the China shock leads to average welfare increases in most U.S. states, including many that experience unemployment during the transition. However, nominal rigidities reduce the overall U.S. gains from the China shock between one and two thirds. In addition, there are ten states that experience welfare losses in the presence of downward nominal wage rigidity but would have experienced welfare gains without it.
    Keywords: Keynesian economics
    Date: 2020–09–01

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